Once a property has been purchased, renovated, and listed for sale do lenders like FHA/VA have requirements of prior ownership that would restrict lending?
My understanding is that the property must be owned for at least 12 months by the seller before they will loan a new buyer money.
Thanks ahead
It really depends on the lender. Some have no title seasoning requirements, some have 3 months, some 6, etc.
FHA I believe is 90 days, but you should double check.
Thanks Lori,
I have only flipped two houses thus far. I remember the last lender had a problem due to the fact that I had only owned the house a couple months prior to the sale.
I have been looking to find more information from the selling side of house flipping and yet to find the specific information.
It has been a couple of years since I have purchased, renovated and sold any properties and before I get going again am trying to eliminate any potential problems with lenders.
Any other input or directions as I seek the information would be greatly appreciated.
Sincerely,
Since your doing a rehab it is best to take before and after pics and invoice what is being done. Also try and use the same appraiser as they can note house was rehabbed and give input on doing past appraisal. When the buyers mortgage broker sumits the apprasial to the bank, you can provide them with pics in pdf.format of before and after along with what has been done via invoices to justify the price increase for the flip. Make sure you include hours worked on project yourself, as your time is worth money too…
Your head is in the right place (measuring an exit strategy)—FHA will be the premier tool for your buyers with credit challenges/low FICOs—FHA does have a 90 day title seasoning guideline (which shouldn’t present a problem unless you do your rehab on a quick time basis).
Regards,
Scott Miller
Thank to everyone for the input.
One more question on this subject…
Does one have to disclose the purchase price to a real estate company or lender, or can this be kept confidential?
If you intend to get financing, then you will need to (unless you are the real MarkieMark, and in that case, you can go all cash)… :biggrin
Regards,
Scott Miller
Hi Scott,
I pay cash for the properties…sorry. The reason why I ask is on the last sale the lender wanted to know how much I paid for the property. I actually refused to provide the information to them and it still went through.
I always have the repair costs available. I am the real MarkieMark in my own mind… :beer
You must be MarkieMark, because I have never heard of such a thing—Year acquired and original cost are right on page 1 of the 1003…
I’ve heard of no income/no asset loan programs, but I can’t wait to read the guidelines on the “none of your business” loans…
Small local depository banks generally make there own rules (because they retain and service the loans themselves), but this is a huge break from the norm.
Regards,
Scott Miller
SharkieMark,
If the home you bought was listed in the MLS, even if you pay cash, the sales price will be archived with the closing date. The appraiser on the new deal will surely figure it out and presto so will the underwriter. In most states the seller is required to file a sales disclosure in the county the property is in. This is normally done by the closing agent. I believe this is public info.
-h
I guess someone should let the Dallas Appraisal District know all these things. :shocked Channel 5 did a special report the other night showing how thousand of homes are under appraised by millions of dollars.
Many wealthy people buy homes without disclosing the purchase price, therefore having no comps the county under appraises them by millions.
They showed several homes listed for sale at over 10-million and CAD appraisals as low as 2-3 million.
If this information is assessable to the public “anyone”…like you are indicating You then know more than myself and the county. :banghead